Plugged In: the energy news podcast Germany split over bidding zone division
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May 2, 2025 Casimir Lorenz, Managing Director for Central Europe at Aurora Energy Research, shares insights on the contentious proposal to divide Germany's bidding price zone into five parts. Tobias Federico, Chief Product Officer at Montel, discusses the hedging complications and the political backlash this change has ignited. Morten Pindstrup, International Chief Engineer at Energinet, offers a TSO’s perspective on the challenges involved. Together, they explore the ramifications for Germany and how this split could affect neighboring Denmark’s energy market.
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TSO Study Triggers Six‑Month Decision Clock
- TSOs published a long-awaited bidding zone study recommending Germany be split into five zones while Sweden stays as is.
- The report starts a six-month legal clock for Germany to accept or propose alternatives.
Split Is As Much Political As Technical
- Splitting Germany's single price zone is politically charged because federal states fear being worse off.
- Casimir Lorenz says perceived losers must feel they benefit for a split to succeed.
Price Signals Must Match Physical Flows
- Wrong price signals can cause north Germany to export cheap power and trigger storage and consumption there while south faces shortages.
- Casimir Lorenz argues zonal prices must reflect regional physics to avoid perverse dispatch and thermal plant starts.